Inbound Logistics: Feature Story -
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Published on: 7/12/2006
Last Visited: 7/12/2006
"The industry is changing so quickly," says Bill Adams, Americas logistics director for Wilmington, Del.-based Hercules, a $2-billion company that produces an array of chemicals for paper, paint, and textile manufacturers.
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"We are impressed with the way the partnership works," says Adams.
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"The government's action created an almost instant driver shortage, because shipping volumes were cresting at the same time," explains Adams.
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"Chemical companies can still get competitive rates, preferred treatment, and good service, but the market is not as flexible as it used to be," says Adams.
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"Any manufacturer that relies on petrochemicals or petrochemical derivatives is feeling cost pressure," says Adams.
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"Companies with a manual, clumsy process for managing global transportation and inventories can easily wash out the benefits of cheaper material sources," says Adams.New dynamics in the transportation market are forcing chemical companies to reexamine -- and sometimes radically alter -- their logistics infrastructure. Prior to 2003, for example, Hercules operated its own transportation group, which managed the company's freight operations and dealt directly with carriers and other transportation service providers. "But we realized we didn't have the leverage or the technology to achieve the best overall transportation cost and service values, let alone respond to changes with the agility needed to be competitive," says Adams.That's when Hercules decided to work with 3PLs.The company turned to Odyssey Logistics & Technology to handle its North American logistics operations, and de Rijke Logistics in the Netherlands to manage its European shipments. By partnering with a 3PL, Hercules is part of a growing chemical industry trend.These days, most small- to mid-sized chemical companies use some form of outside logistics help.For most chemical producers, 3PLs are the wave of the future, says Adams. "Major chemical manufacturers may have the critical mass to justify in-house transportation, but for a company our size, using a 3PL makes a lot of sense," he says.
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Hercules, for example, conducts random audits of carrier unloading activity to be sure carriers are performing these tasks safely, says Adams.It can be tempting for chemical companies to turn a blind eye toward carriers that sacrifice safety and security for the ability to offer lower bids, but Adams and his counterparts resist the urge to use carriers that cut corners."It is incumbent on chemical shippers to be careful when selecting carriers.We must exercise due diligence to pre-qualify carriers that meet standards and will hold to those standards themselves," he says.
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